The community began circa 1900 with the discovery of gold and silver-rich ore by prospector Jim Butler when he went looking for a lost burro he owned. The burro had wandered off during the night and sought shelter near a rock outcropping. When Butler discovered the animal the next morning, he picked up a rock to throw at the beast, but instead noticed the rock was unusually heavy. He had stumbled upon the second-richest silver strike in Nevada history.[citation needed]

While Butler may have been responsible for the first ore strike, it took men of wealth and power to consolidate the mines and reinvest their profits into the infrastructure of the town of Tonopah. George Wingfield, a 24-year old poker player when he arrived in Tonopah, played poker and dealt faro in the town saloons. Once he had a small bankroll he talked Jack Carey, owner of the Tonopah Club, into taking him in as a partner and to file for a gaming license. In 1903, miners rioted against Chinese workers in Tonopah, which spurred a boycott in China of U.S. goods.

By 1904, after investing his winnings in the Boston-Tonopah Mining Company, Wingfield was worth $2 million. When old friend George S. Nixon, a banker, arrived in town, Wingfield invested in his Nye County Bank. They grub staked miners with friend Nick Abelman, bought existing mines, and by the time the partners moved to Goldfield, Nevada and made their Goldfield Consolidated Mining Company a public corporation in 1906, Nixon and Wingfield were worth over $30 million[3]

Real estate and gaming became big business throughout Central Nevada, but Wingfield saw the end of the gold and silver mining riches coming and took his bankroll to Reno where he invested heavily in real estate and casinos. By 1910, gold production was falling and by 1920 the town of Tonopah had less than half the population it had fifteen years earlier.

Small mining ventures continued to provide income for local miners and the small town struggled on, taking advantage of its location about halfway between Reno and Las Vegas as a stopover and rest spot on a lonely highway. Today the Tonopah Station has slots and the Banc Club also offers some gaming.

Recently, Tonopah has relied on the nearby Tonopah Test Range as its main source of employment. The military has used the range and surrounding areas as a nuclear test site, a bombing range, and as a base of operations for the development of the F-117 Nighthawk. In the fall of 2011, a California-based solar energy company, SolarReserve, started construction on $980 million advanced solar energy project just outside of town called the Crescent Dunes Solar Energy Project. The project incorporates SolarReserve's advanced solar energy storage technology and will put Tonopah at the worldwide center of technology for this class of solar energy storage. The project construction activities, which peaks at 800 workers on site, will be complete in 2014.[needs update]

Tonopah's name was bestowed by its founder, Jim Butler, and was thought to be a Shoshone Indian word, pronounced "TOE-nuh-pah."[4] Although the town previously had a variety of names, including Butler City, Jim Butler's name remained. According to local history, the name is said to mean "hidden spring".[5] However, linguistically the name derives from either Shoshone to-nuv (greasewood), or Northern Paiute to-nav (greasewood), and pa, meaning water in both dialects.[6]

There are an average of 50.3 days with highs of 90 °F (32 °C) or higher and 157.8 days with lows of 32 °F (0 °C) or lower. The record high temperature in Tonopah was 104 °F (40 °C) on July 18, 1960. The record low temperature was −15 °F (−26 °C) on January 24, 1937 and January 23, 1962.

There are an average of 37 days with measurable precipitation. The wettest year was 1946 with 10.27 in (261 mm) and the dryest year was 1927 with 1.92 in (49 mm). The most precipitation in one month was 2.87 in (73 mm) in November 1946. The most precipitation in 24 hours was 1.62 in (41 mm) on August 17, 1977. Average annual snowfall is 13.0 in (33 cm). The most snowfall in one year was 79.3 inches (201 cm) in 1946, including 37.0 in (94 cm) in November 1946.[7]

There were 1,109 households out of which 32.2% had children under the age of 18 living with them, 48.9% were married couples living together, 7.5% had a female householder with no husband present, and 39.4% were non-families. 34.2% of all households were made up of individuals and 10.1% had someone living alone who was 65 years of age or older. The average household size was 2.33 and the average family size was 3.03.

In the CDP the population was spread out with 27.1% under the age of 18, 6.2% from 18 to 24, 29.3% from 25 to 44, 27.3% from 45 to 64, and 10.1% who were 65 years of age or older. The median age was 39 years. For every 100 females there were 108.3 males. For every 100 women age 18 and over, there were 105.9 men.

The median income for a household in the CDP was $37,401, and the median income for a family was $47,917. Males had a median income of $40,018 versus $22,056 for females. The per capita income for the CDP was $18,256. About 5.7% of families and 11.2% of the population were below the poverty line, including 7.3% of those under age 18 and 19.1% of those age 65 or over.

During the silver bonanza of the first decade of the 20th century, the need in the precious-metal fields for freight service led to a network of local railroad lines being strung across the Nevada desert to Tonopah. Examples include the Las Vegas and Tonopah Railroad, the Tonopah and Goldfield Railroad, and the Tonopah and Tidewater Railroad. One key commodity hauled to the silver mines was coal, used to power mine operations and also the stamp mills built in and around Tonopah to break apart the hard-rock ore for milling and refining.

Mizpah Hotel, with construction begun in 1905, shortly after the town of Tonopah was founded, and finished in late 1908, after several delays.[15] The Mizpah Hotel was once the tallest building in the state.